UK mortgage advances rise 11.1% as high-LTV lending hits, reveals research

By Divya Shah

Gross mortgage advances in the UK rose by 11.1% during the second quarter of 2026, while the share of lending above 90% loan-to-value (LTV) reached its highest level since 2008, according to the latest Mortgage Lenders and Administrators Statistics (MLAR).

The data is based on returns from around 340 regulated mortgage lenders and administrators and showed gross mortgage advances increased to £77.4bn, up 31.7% from the same period a year earlier.

The outstanding value of residential mortgage loans grew by 0.8% quarter-on-quarter to £1.76tn, representing a 3.1% increase compared with the second quarter of 2025.

New mortgage commitments, which measure lending agreed for advancement in the coming months, rose by 1.4% during the quarter to £79.2bn. The figure was also 1.3% higher than a year earlier.

The proportion of gross mortgage advances issued at LTV ratios above 90% increased by 0.4 percentage points during the quarter to 8.4%. The share was 1.4 percentage points higher than a year earlier and marked the highest level recorded since the second quarter of 2008.

Meanwhile, 94.5% of gross advances were made at interest rates less than 2 percentage points above the Bank Rate. This was down by 0.2 percentage points from the previous quarter and represented the lowest proportion since the first quarter of 2023.

Owner-occupier remortgaging accounted for 31.2% of gross mortgage advances during the quarter, up 3.1 percentage points from the previous quarter and 2.2 percentage points from a year earlier. The proportion was the highest recorded since the first quarter of 2024.

In contrast, advances for owner-occupied house purchases declined by 1.6 percentage points to 56.1%, although the figure remained marginally above its level a year earlier.

Buy-to-let lending represented 8.0% of gross advances, down 0.9 percentage points from the previous quarter and 1.2 percentage points lower than a year earlier. This was its lowest share since the third quarter of 2024.

The value of outstanding mortgage balances in arrears declined by 1.9% during the quarter to £19.7bn, the lowest level since the third quarter of 2023.

Mortgage balances in arrears were 7.3% lower than a year earlier, while arrears as a proportion of all outstanding mortgage balances remained unchanged at 1.1% during the quarter. The ratio was 0.1 percentage points lower than a year earlier.

Richard Pike, Sales and Marketing Director at Phoebus Software, said the data highlighted a market that continues to demonstrate resilience despite ongoing economic uncertainty.

Pike added that while gross mortgage advances recorded strong quarterly growth, the smaller increase in new commitments suggests that much of the activity is being driven by borrowers refinancing at the end of fixed-rate deals rather than a significant expansion in new lending.

He continued that continued declines in arrears and possessions indicate that most households remain able to meet their repayment obligations despite affordability of pressures and broader economic challenges.

Looking ahead, Pike said lenders will need to adapt to increasingly diverse borrower requirements, balancing demand for greater refinancing flexibility with the need to support customers facing persistent affordability pressures. He noted that firms capable of combining effective servicing with adaptable products and processes will be better positioned to navigate evolving market conditions.